Under what condition does a Best Western franchisee receive an exclusive territory?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
nt. If your membership application relates to the right to convert an existing hotel to a System Hotel, you will already have the location for your Property.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. If you are a "Qualified Hotel," you will receive an exclusive territory with respect to System Hotels. This means that neither we nor any of our affiliates will open, or allow to open, a System Hotel within a circular area around the Site, whose radius is measured from the center of the main entrance of the lobby and is of a length determined by the MMA Radius Chart below (the "MMA Area").
A "Qualified Hotel" is a System Hotel that:
- (1) Is current on all dues, fees and assessments and has not been 60 days past due on any of its dues, fees, or assessments twice within the last 12 months;
- (2) Its most recent three quality assurance scores, or such lesser number of scores if the Property has not yet received three quality assurance scores, average at least 50 points higher than the passing level as defined in the Regulatory Documents;
- (3) Is not past due in meeting any conditions or requirements which would constitute grounds for cancelling the Membership Agreement;
Source: Item 12 — Territory (FDD pages 77–84)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, franchisees do not typically receive an exclusive territory. However, a "Qualified Hotel" will receive an exclusive territory known as a Member Market Area (MMA) with respect to other Best Western System Hotels. This means that Best Western will not open or allow another to open a Best Western System Hotel within a circular area around the franchisee's location. The radius of this area is determined by the MMA Radius Chart.
To be considered a "Qualified Hotel", a Best Western System Hotel must meet certain criteria. The hotel must be current on all dues, fees, and assessments, and cannot have been 60 days past due on any of these payments more than twice within the last 12 months. Additionally, the hotel's most recent three quality assurance scores must average at least 50 points higher than the passing level. The hotel also cannot be in violation of any conditions that would be grounds for cancelling the Membership Agreement. Finally, the hotel cannot be a BW Signature Collection® hotel, a BW Premier Collection® hotel or a SureStay Collection by Best Western® hotel.
Even with an MMA, Best Western franchisees may still face competition. The FDD states that franchisees may compete with other franchisees, outlets that Best Western owns, or other channels of distribution or competitive brands that Best Western controls. Best Western also retains the right to engage in other businesses, even those that compete with the franchisee, and can solicit reservations from customers within the franchisee's MMA without compensation to the franchisee.